(Updates prices, adds analyst comment)
By Renita D. Young
NEW YORK, Sept 13 (Reuters) - Gold prices slid on Thursday as
investors purchased riskier assets instead of seeking a safe haven in
gold, amid hopes for a new round of U.S.-China trade talks.
Spot gold declined 0.3 percent to $1,202.30 per ounce by 1:34
p.m. EDT (1734 GMT), after earlier hitting its highest level since
Aug. 28 at $1,212.49. Bullion gained 0.7 percent in the previous
session in its biggest single-day rise since Aug. 24.
"Gold pared gains as China became a focus point once
again," said George Gero, managing director of RBC Wealth Management.
U.S. gold futures for December delivery settled down $2.70, or
0.2 percent, at $1,208.20 per ounce.
"It's a break of the correlation today between the dollar and
gold. Even though the dollar is down, we're not seeing that equate to
higher prices in precious metals," said Chris Gaffney, president
of world markets at TIAA Bank. "It just seems like the sentiment
for the meals is very negative."
The dollar index declined against a basket of major currencies
after data showed U.S. consumer prices increased less than expected in
August, paring traders' outlook that domestic inflation is
A weaker dollar typically makes dollar-priced gold less expensive
for holders of other currencies, but the correlation broke on Thursday.
The CPI data came after soft U.S. wholesale price data undermined
the case for a faster pace of policy tightening by the Fed. The U.S.
central bank is widely expected to raise benchmark interest rates at
its September meeting.
Higher rates make gold less attractive since it does not pay
interest and costs to store and insure.
In trade talks, senior U.S. officials sent an invitation to their
Chinese counterparts to hold another bilateral trade meeting, raising
speculation about a subtle shift in Washington's policy.
The months-long trade rift between Washington and Beijing has
prompted investors to buy the U.S. dollar in the belief that the
United States has less to lose from the dispute. This has driven
investors toward record short positions in Comex gold and heavy
liquidations in gold exchange-traded funds.
But on Thursday, possible progress in the trade rift pressured the
U.S. dollar, traders said.
Gold prices have fallen nearly 12 percent since a peak in April
amid intensifying global trade tensions and under pressure from rising
U.S. interest rates.
Meanwhile, spot silver was flat at $14.21 per ounce, earlier
touching $14.34, a nine-day high. Platinum increased 0.3 percent to
$800.74, after touching a one-month high of $812.30. Palladium
gained 0.9 percent to $983.50 per ounce.
(Reporting by Renita D. Young in New York additional reporting by
Nallur Sethuraman and Vijaykumar Vedala in Bengaluru Editing by Will
Dunham and Matthew Lewis)
((Renita.Young@tr.com; 1 646 223 8699; Twitter: @RenitaDYoung twitter.com/renitadyoung))